Markets & Finance

Elan, Biogen Tumble

February 27, 2005

Elan Corp. (ELN) and Biogen Idec (BIIB) announced the voluntary suspension in the marketing of Tysabri, a treatment for multiple sclerosis. The decision is based on recent reports of two serious adverse events; one fatal and one suspected case of PML.

May Department Stores (MAY) agrees to be acquired by Federated Department Stores (FD) in a $17 billion deal, including debt assumption. Terms of the agreement give each May share will be converted into a right to receive $17.75 cash and 0.3115 of Federated share.

Qwest Communications (Q) is willing to revise its latest stock-and-cash offer for MCI (MCIP), but only if MCI indicates it is willing to engage in discussion with Qwest, according to the Wall Street Journal.

XM Satellite Radio (XMSR) says it is expanding its basic service package and that monthly subscription price for its basic service will increase to $12.95 beginning Apr. 2, 2005.

Banc of America downgrades General Motors (GM) and Ford (F) to sell from neutral.

H.J. Heinz (HNZ) posted 43 cents, vs. 57 cents third-quarter earnings per share as asset impairment charge offset a 7.8% revenue rise. The company says it remains on track with $2.32 to $2.42 fiscal 2005 earnings per share target, with an expectation toward the lower end of the range.

Circuit City (CC) announces the resignation of executive vice president and COO John W. Froman, effective March 1, 2005.

USF Corp. (USFC) agrees to be acquired by Yellow Corp. (YELL) in deal valued at approximately $1.47 billion, including debt assumption. Terms of the agreement give investors $45.00 in cash or 0.9024 Yellow Corp. shares (fixed ratio) per USF share.

JP Morgan upgrades Best Buy (BBY) to overweight from underweight.

Williams Companies (WMB) catious investors may want to take some profits. Williams could fall back to $15 or so if gas prices retreat from recent $6.43 per mBtu to the $4 area, according to Barron's.

Prudential downgrades Novell Inc. (NOVL) to underweight from neutral.

Medtronic (MDT) voluntarily recalled a limited number of Lifepak 500 automated external defibrillators (AEDs). The company says the AED may not analyze patient's heart rhythm even when the electrodes are properly connected.

Pathmark Stores (PTMK) is in talks to be sold to C&S Wholesale Grocers, according to the New York Post.

Lehman upgrades Maxim Integrated (MXIM) and Linear Technology (LLTC) to overweight from equal-weight. The commpany raises the semiconductor group to positive from neutral.

Mylan Labs (MYL) and King Pharmaceuticals announce that they have mutually agreed to terminate agreement pursuant to which Mylan was to acquire King. The companies were not able to agree upon terms for a revised transaction.